How to become a Consistently Profitable Trader

[Music] if you want to become a consistently profitable trader you don't want to miss this video in it you'll learn the path to becoming profitable directly from our New York City trading firm along with the exact training technique that the traders on our desk used to become profitable and the step-by-step details of a proven and powerful setup that can help get you there this is not information the average retail trader has access to so stick around you're gonna love this hi I'm Mike bellifiore managing partner of SME Capital a proprietary trading firm located in midtown Manhattan I'm also the author of the trading classic one good trade and the playbook go ahead and click our subscribe button so you don't miss any of our trading videos produced for the trading community so the path to consistently profitable trader is one exposure to trading setups with edge with training to experiment with trading setups with edge 3 develop a playbook of setups best for you the playbook that playbook is your trading business and finally trade your PlayBook in real-time and hey not the other trades so let's get into that powerful training technique and that powerful trade setup so you guys are armed with a technique and a trade for you to improve my second book that I wrote is called the playbook and in the playbook I map out and outline how to use this powerful training technique to help you improve as a trader how to use this powerful technique to build your business and it's a technique that we use daily on our trading desk on our piano trading desk as our desk needs to make significant P&L to pay for all the stuff here in New York City and we don't make money off of commissions and nobody puts money capital the firm fully backs traders and we split profits with them so we need to make money too to do well this technique essentially is something that we teach all of the people we hire at the desk and train up to consistently profitable and and then the best of them into seven-figure traders and then the best of those even better and it's something that's carried on as guys are getting really good so even guys who are seven-figure traders are still employing this training technique to build a trading business so what we do is we archive a set up that makes the most sense to us at the end of each trading day so let's say you say a see a trade during the day whether you're in it or whether you weren't in it you figure out the variables of that trade you deconstruct it and you put it into this SMB playbook template form so you're getting a pretty clear picture of the important variables and the best way to deconstruct it so you can use it going forward new and developing traders build the playbook the second part of our training program in-house we call a trader development and during that period of time one of the habits that we want to make sure it goes into the routine is for them to do a daily playbook trade and for that to go into their playbook and for them to build this playbook this playbook then becomes their trading business you'll hear on our desk after guys have built the playbook comments like particularly from the the better traders I wanted to stay in my lane I want to trade my playbook and so when you're a developing trader and when you're an experienced trader you're archiving these really a plus setups that you're seeing during the day that make the most sense to you that you like the best and you're putting them into your PlayBook it's a playbook that actually sits on your trading desk this is your trading business and when guys fear outside of the playbook that's when they're over trading that's when they're getting into lesser trades the idea is to do more of what you do well and bigger by understanding exactly what your business is with this playbook first then you can do that so we talked a little bit about the path to consistently profitable trader exposure to trading setups with edge with training so you want to be exposed to the different ways that really great traders are making money I prop desks and those short-term traders if you're not exposed to those trading setups with edge in your training you might get fooled into thinking it's your psychology or it's something else you need setups with edge you need to experiment with trading setups with edge you can be a pretty decent trader if your trading setups without edge you're not gonna make money there at the end full stop and we spend a lot of time on our desk studying whether or not our setups have edge and making sure that our setups that we're trading have edge you want to develop a playbook of setups that are best for you so you get exposed to lots of different types of setups and then you want to gravitate towards the ones that are there best for your personality and your cognitive strengths this playbook that's your trading business you don't V you're outside of your playbook that's over trading you don't take lesser trades those are trades outside your playbook trade your PlayBook in real time again period the end full stop hey and not those other trades and not those lesser trades that's the path to a consistently profitable trader so I think what we'll do here guys is we'll just we'll put this Kurt we'll shoot this we'll shoot this with Kurt and put this in so let's talk about a daily chart consolidation breakout let's talk about a trade it's very powerful that we use daily on the desk for you to coop into your trading playbook and for you to co-op to trade in real time when I think about a set up I want to understand the variables that are important to its succeeding remember we talked about setups with trading edge the variables that are important to me for a breakout trade are hey is this above an important technical level on our daily charts in this setup is there elevated our Vil relative volume during that trading session when I look at the breakout am I seeing volume spike into that breakout am I seeing a sharp move away from price when we get above that breakout price is the stock holding above view op that is an indicator that is the most effective indicator that we use as intraday active traders when I look at the pullback is there decreasing volume into that pullback so I want to see a push far away from the breakout area on high volume and I want to see a shallow pullin on decreasing volume when it's pulling in am I seeing buying on the tape into that pull in is it hard for it to go down I want to see the market overall in my favor I want to see corresponding stocks or that sector in my favor I'd love for a particular breakout trade to also have a news catalyst I'd like for there to be an announcement out recently that gives people more confidence that this company is gonna do well going forward and I want that news to be unusual and I want it to be unexpected so I want there to be an announcement that they're they've beaten profits for the full year they've beaten guidance for the full year by a lot and people didn't expect that I want to see maybe they've got a new drug I want to see maybe they're a new product that they're selling is doing better than they thought I want to see more people are potentially going to their site and spending more time on their site the news should be unusual it should be unexpected and it should give confidence in institutional buyers to put on big size four six eight twelve eighteen months out I'd love for it to be in a hot sector I'm showing an example that I want short interest to be on my side so I'd like the short interest to be high if I'm buying a breakout that causes people to have to buy the stock and I want to hold until there's a reason to sell I don't want to be feeling the pressure to have to sell this and take profits too quickly I want to be able to capture a decent part of this move I want to see that there's now a reason to get out of it we call that a reason to sell so those are variables that go into a really good breakout trade and what I often see as the difference between the elite traders from the underperforming traders is they're not crafting their playbook trades with the variables that are important to a really good breakout trade now I'll give you an example of that actually with the trader I'm working with and the advantages of this trade of learning this trade and archiving this trade and putting into SMB playbook form and putting it into your playbook is that you're trading in the same direction as the largest market players something has a big break out there are big institutional large hedge fund large trading Big Money traders behind the idea that's what's that's where you're seeing that's why the elevated volume is there that's why the push away from price that the big spike to the upside is there why that's why that's there it's it's helping you capture moves that are relatively stronger than the market that's a very key principle for traders we want an excellent return on investment we need to be making a lot more money than the overall market so if the market is up 10% I mean our traders aren't making 10% they're making many multiple times that in fact it's not even a measure that we use because our traders are so much more efficient with capital than the S&P this active trading that we do allows us to be able to out return to outperform of just a regular performance of market we want to find tremendous risk reward setups so downside of one upside of three four five maybe even ten and the very best you're gonna be able to walk into homerun trade so we're gonna hit a lot of singles we're gonna hit a lot of doubles but then this is a trade where you can walk into a home run while also controlling your risk it's a very scalable trade particularly in the large caps and the high beta names you can trade it very big you're gonna see this trade opportunity every day this certainly is best in a strong market but also holds up well and other market conditions what I really like about this trade and what we're doing a lot of on this desk is that we're expressing it both with stocks and options so if you're better at options and your stocks you can use this setup to express edge if you don't like options you only like stocks you know have at it with stocks but one of the things we're seeing with our best traders as a path of growth for them is that they can express this with stocks and with options and so it allows them to get bigger because now they have two different ways to put the trade on and so they'll have a bunch of stocks they'll have a bunch of calls and both are working nicely and psychologically for whatever reason it enables some to be able to trade these with more risk and that's what you want particularly when you have a trade with edge you want the odds on your fate you want the odds in your side I mean that's what ratings about is what are the setups where the odds are in your favor and how do I put more money to risk when the odds are in my favor you know very recently on our desk this very setup one of our traders made a hundred and seventy thousand plus in Tesla a daily breakout trade one of our traders recently made forty thousand another made twenty thousand with options in a dbx breakout very recently so I say that because this is what these are setups we're using on our desk these are setups that we're using recently you just set ups that we're gonna continue using it works in all markets it works in all sectors it works in all regimes and what I mean by that is you know when I say it works in all markets it really does and I don't just mean like the difference between a futures market and an equities market I literally mean US markets versus a foreign market so one of the traders who I work with on a daily basis who I love is a seven-figure trader and he trades with tremendous size and he actually has to trade with tremendous size because his market the Australian market doesn't offer as much movement as the US markets but he also trades with tremendous size gets very good trader and seven-figure trader and can and enjoys the challenge of being bigger and better and so we exchange well he sends me a daily report card and he does so with another very large trader friend of him of his from Australia as well and so this other friend of his is on the exchange as well and myself and this other trader provide feedback to the seven-figure Australian equities trader and in one of the report cards well not in one of them but but but in a few of the report cards I noticed something that kept coming up and I noticed that while he was making a tremendous amount of money that he needed some work if he wanted to trade even bigger and trade more consistently with his breakout trades and he needed work very specifically with his variables that he was considering and I talked about this and this at the very beginning you need to be considering the variables that really matter you need to be putting them into your PlayBook template trades that you're archiving you need to be developing these breakout trades with the right variables and you know it wasn't that this trader was was was bad it's just that he to be better he needed to be better with his playbook trades with the variables he was considering and I noticed that he wasn't using our ball enough and I noticed he wasn't using the volume into the break into the breakout enough and I said hey let's make a list of the variables that you want to see for your eight-plus setups and breakout trades and and I said let's start really paying attention to our bowl and volume on top of the other variables you were thinking about like a news catalyst and technical levels and the tape let's that's let's really start to do that and he did he did start focusing more on our Vil and in volume which he hadn't in the past and he started to see better success in consistency and the ability to size bigger and then profitability because he was adding two more of these variables with heightened focus into his playbook trades so a big takeaway from that is we're seeing this this trade work in different markets than just US equities the fundamentals of the particular trade I want to outline for you guys to to learn how to think through this trade you guys to walk away armed with a set up that you can use you can start using with your trading so the fundamentals for this trade and we break down a playbook trade in a very specific way so we want to take a look at the news the fundamentals of a particular company alright and so in this case I'll go through the other variables but one of the variables that we really need to go over our fundamentals so Dropbox is a recent IPO IPO for $21 a share Dropbox is in a hot sector the cloud storage the cloud computing space it doesn't really matter what spaces is in what matters is it's hot those stocks are doing really well there's no recent news catalysts in this which actually really like because a lot of the teaching that we do here we talk a lot about a news catalyst in something and so we're gonna get to remove that from an example and show really good profitability in the trade absent that the ATR on this particular stock it's about a dollar look at the arvo on this particular day look at the arbol look how elevated it is they're team plus three are better is the stock it's really in play one of the things I like to use our bow for is to confirm that I'm trading a stock really in play three or better is really nice thing play 13 is things just absolutely in play it essentially means that it's doing 13 times the volume that it does on a general day price range short float not really on our side in this particular trade that's okay you're not gonna get all of the variables that you want and all your trades that's okay but if you get a lot of them that's that's that that helps you make trade decisions average volume is good we can get in and out of the stock for million it's liquid all right the big picture so the big picture is how is the overall market doing and how is the overall sector doing you got to start there you can't just trade a stock in a vacuum without understanding how is it sector and how its is how is the overall market doing we're going to take a top-down approach to making trade decisions so you can see the spies in a range between 279 20 and 277 80 the spy opened up strong but sold off in the afternoon and consolidates in a range around 270 850 the Q's rallied strong through yesterday's highs and had just recently made a new important high in Q's tick on that day was strong opened up really strong anything above 800 on tick that's an indicator that we really like to use that studies and tracks how how overall stocks in NY I see are doing so we're getting a high tick a positive tick staying positive until 10:15 showing overall market strength off the open and really I think the most important part of this big picture for this stock excuse me is that IQ and hua hu why a recent China Chinese POS and they had just made new all-time highs on this day so the IPO sector of the marketplace was really hot so you're in a hot sector but you're in this segment of stocks recent IPOs that are really really hot and that's bringing positive sentiment towards tech names and IPOs so the big picture is hey this is a recent IPO and others are really running that matters so we take a look at the spy on the daily charts you can see it's in a channel between 277 50 and 27 279 20 we want to take a top-down approach this is where we are with our daily charts with the spies on the one minute 279 20 acts as the upper range of that daily range and we're covering near the top of that range so we're in a strong up trending market the Q's had broken two all-time highs recently and are very nearly towards those all-time highs the tech sector is very strong it's outperforming this makes it more likely that a stock that breaks out as light is gonna go up no real sector strong and and healthy that's evidence for a stick very strong mostly positive for the day very strong kick on the open showing us that the market overall is strong ok and now let's take a look at our daily charts and this is the most meaningful chart that we've looked at to date 32 is a very significant resistance level fails once at 32 twice at 32 3 times the 32 coming back for the fourth time couldn't get above there another time so 4 times it couldn't get above it and now it's approaching it for the fifth time it's doing a really nice job of holding this 30-ish area so the pull in from 32 is not particularly strong that 29 had acted as significant support 32s resistance and now we're holding a nice bowl shaped pattern a little bit higher and we're starting to slowly creep up towards our resistance area 32 above is our signal we get above 32 we've got a trade decision this is a very clear resistance level on our daily charts if we get above this 32 level that's really going to capture our attention we look at our 5 minute chart dbx breaks through 32 daily resistance in the pre-market the pre-market volume was 5 million shares that's larger than the average daily volume for the stock overall so in the pre market we're already getting elevated volume and now we're above that price that's telling us the stock is really in play and that there's lots of interest in owning the stock on our one-minute you can see it had a really really solid run I like to look at our volume when we get above 32 and you can see elevated volume let's talk about that specifically though so we know that you know we want to get long this dbx when we get above 32 we get above that daily resistance we open up we get that strong opening drive so we talked about this right we want to move away from price I talked about this in one of our variables I want to sharp move away from price that's one of the variables that tells us that the daily breakout is likely to work ok and so did we get that you're damn right we got that excuse me we did get that and then look the other thing we want to check for is did we get a let's go back to our list of variables all right do we have elevated or do we have elevated our ball we do are we above an important technical level in our daily charts we are did we get a volume spike into that breakout let's see we did get a we get a volume spike right there okay and then now we want to look for decreasing volume and a shallow pullin we get that we look down at our volume down here decreasing volume coming in we're holding above you up the Purple Line is view up so we're holding above you up that's one of our variables again rolled and cleanly above you up and so when we pull into that 33 area we have a trade opportunity to add to our position so we want to own some when we get above 32 ideal to own this in the pre-market as it's getting above 32 and volume is elevating ideal to buy some on the open for an opening drive when it's holding above 32 and showing you the push to the upside with volume and you want to buy more you want to buy more this is working this trade is working it's holding above you up you're getting the variables you want for your breakout trade it's time to put on risk and one of the things that is done very well in this trade is selling into strength and buying back into weakness a really good best practice that experienced traders employ when they have a thesis and their right is to take profits into strength and to find areas to buy back into Poland's that way that they may cash flow in the direction of the breakout they're holding their core and they're making cash flow along their core by selling at the spikes and buying in to pull backs and you can see right here we're getting an opportunity to sell into strength as there's unusual volume that's coming in and that's signaling a move could be read an end and so you know again as we look into this trade a little bit deeper 3650 is our target for our second lot because it wick through that level and came back down potentially showing the uptrend move needs a pull in pull back so we're taking off and we pull back into view up you want to put some more back on so we're taking off we're putting back on we're holding our core dbx shows strength and breaks through the prior high so we're looking to hold two Lots for a new high we're selling the second lot when a new high is made and then a pullback and you know right here this is a good place to sell your getting out because it's it's got a double top triple top failing to break back through this thirty eight oh nine area slowing up not Mike making new highs really far away from view up looking for reasons to exit it's not going higher lots of risk and in terms of a pullback and so this is a trade that one of our I asked one of our newer guys to outline for you guys and this is how he attacked it as one of our newer guys who traded this pretty well as you get a little bit more experienced she'll trade it even better but he did a nice job on this did a really nice job on this and you know it all emanates from the variables this is what you want to say for a breakout trade these are the conversations you want to be having in your head is it above an important daily resistance level am I seeing elevated are vol intraday am I seeing a volume spike into a breakout am i seeing a sharp move away from price I am is it holding above you up it is am I seeing decreasing volume into a pullback I am is there buying on the tape into the pole Poland there was is the market overall in my favor it was are the corresponding stocks insect and the sector in my favor it was was there new news catalyst there wasn't is there a hot sector is this in a hot sector it is short interest not on my side you want a reason to hold so we're getting almost all of these variables and that's giving us confidence to put a trade in in our playbook and so you know one of the things that I just sort of see and I'll go back to this list again one of the things that I say with traders who are underperforming from elite traders or the underperforming traders are not thorough enough with the variables they want to see in these breakouts and maybe they look for two variables it gets above the price and it moves nicely away from price you know or if it gets above the price and it pulls in has a shallow pullin that's not enough that's not that is not detailed enough that's not that's not thorough enough that's that's not enough conscientiousness from you as a trader to be a consistently profitable trader but when you start to add these variables it really does make a difference and you east look I saw that with just very recently with one of the seven-figure traders and I'm working with who's already making a lot of money have made him better this is what we're seeing on the desk it's the thoroughness it's the conscientiousness that really makes it makes a big difference okay and I always like to end the play book trade with a trade review how I could have traded it better but the the the trading the trading the the training technique that I want you guys to take away is building PlayBook trades give it a title it's a daily chart consolidation breakout trade come up with a trade strategy what are the variables that I need to look at to make a trade decision one of the variables that helped me in our on my side that give me confidence this is gonna work what are the fundamentals of the trade got to know them that goes in that goes is one of the slow because that's one of the variables of the template I got the title I got that how am I going to trade this what's my trade strategy what are the fundamentals what what's the big picture for the stock what am i long to what am I you know what's my big picture okay what's my big picture okay I got my big picture what are my longer-term charts telling me in this particular name okay I got that what am i intraday charts telling me about that name okay I'm going to put that in what's my trade entry okay I'm going to put that in it's my trade management okay I'm gonna put that in how am I gonna trade this better that's what goes into a playbook and what you do is you leave through this over the weekends of your A+ setups and you start to internalize these trades and get better at them so what you learn from our chat here today is the path of becoming a consistently profitable trader a training technique to help you become a consistently profitable trader a powerful trade setup to help you become consistently profitable trader we say CBT how to develop a trade like a pro which is probably the most important thing with these depth of variables not a lack of depth not a couple but a depth of variables how to build your trading business with a playbook just trade your PlayBook capture trades that make sense to you put them in a playbook and stick to those alright so I just want to make one more comment about becoming consistently profitable trader exposure to trading setups with edge all right you got to go find experienced traders for train and learn setups that measure and and test well you got to experiment with them in real-time or on a demo you've got to be developing a playbook of the setups that are best for you building that playbook and you got to trade your PlayBook in real time this is what we work on with our traders on our desk this is what helps them and in great measure to be successful and so this is what we're sharing with you as to the work that we recommend you ought to get to right now after this after this chat so that you improve all right great and so hey this stuff this stuff is really effective but your head down and do the work it really works so you know look I get a lot of emails and I talk to a lot of people who lament I'm not a cpt how do I become a CPT you know a CPT yet you're not a CPT yet it doesn't mean you're not gonna be a CPT it means you're not a CPT yet start training well today train like a pro build the trading business of setups with edge and a playbook and then and then and and and really only then really only then are you gonna learn just how good you can be I finish my second book the playbook with this quote you can be better tomorrow than you are today okay so please click our subscribe button so you don't miss any of our trading videos produced for our trading community if you want to learn more real-world setups for them to be exact that our traders use including the simple setup that we teach all of our new traders and the setup that turned one of our traders into a seven-figure big money earner check out the free webinar that work currently running just go ahead and click this link to sign up for your free webinar now you're going to learn more in a couple hours from this webinar than from years of online education [Music]

Channel: SMB Capital

Views: 51,148

Rating: 4.9385476 out of 5

Keywords: stock market, day trading, smb capital, trading, investing, markets, wall street, stock trading, options trading, options income, economics, finance, consistently profitable trader, How to become a Consistently Profitable Trader

Id: ZYFnxVzlQDc

Length: 37min 50sec (2270 seconds)

Published: Wed Jun 20 2018